Business Terms Glossary


Definition of ACRS

ACRS is an abbreviation for Accelerated Cost Recovery System.

ACRS is an IRS approved method of calculating depreciation expense for tax purposes. ACRS is often referred to as Accelerated Depreciation.

ACRS was introduced by the Economic Recovery Tax Act of 1981. However, the Tax Reform Act of 1986 amended this depreciation method, defining a modified accelerated cost recovery system (MACRS), which then replaced ACRS for property placed into service after 1986.

The purpose of ACRS and similar depreciation schedules is to get businesses to invest. They are granted a faster recovery on an investment asset's cost and this in turn leads to bigger tax benefits in the earlier years of the depreciation schedule.

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